India and the Eurasian Economic Union (EEU) will shortly begin negotiations for a free trade agreement. The five-member EEU comprises Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia. India’s annual trade with EEU is currently at 8.4 billion dollars.
A strong FTA between India and the EEU is expected to help strengthen the India-EEU strategic partnership.
The EEU has so far concluded only one FTA and that is with Vietnam. India will probably be the second.
The Green Corridor plays a role in promoting trade facilitation between India and Russia. This corridor can be extended to the other EEU countries in due course.
The Eurasian Economic Union was created in 2015 and was meant to be the first successful post-Soviet initiative to overcome trade barriers and promote integration in a fragmented, under-developed region.
It covers a single economic market of 170 million people and a gross domestic product of 2.7 trillion dollars.
On paper, the EEU is an economic, technocratic project that offers some benefits to members, particularly in easing cross-border trade and facilitating labor migration. Access to Russia’s labor market has been an important motivator and, on balance, a positive outcome for struggling post-Soviet economies. There are also expected to be long-term gains from harmonising customs and trade rules.